Valve sued by State of New York over alleged illegal gambling through loot boxes

Valve has been sued by the State of New York over allegations that its loot box systems amount to illegal gambling under state law.

New York Attorney General Letitia James filed the lawsuit on February 25 2026, seeking to “permanently stop Valve from promoting gambling features in its games”. The legal action also calls for the company to repay affected players in New York and “pay fines for violating New York’s laws.”

In a statement shared on X, Attorney General James said, “Valve, a video game developer, has made billions of dollars by letting children and adults illegally gamble for the chance to win valuable virtual prizes. These features are addictive and harmful. That’s why I’m suing to stop Valve’s unlawful conduct and protect New Yorkers.”

The lawsuit focuses on Valve’s use of loot boxes and in-game item systems, including those linked to Counter-Strike and the Steam marketplace. It describes the company’s loot box model as “quintessential gambling, prohibited under New York’s Constitution and Penal Law.”

According to the New York Constitution, “no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling … shall be authorized or allowed within this state.” The filing argues that “Valve’s loot boxes have not been specifically authorized by law, and are unlawful.”

In addition to halting the practice, the Attorney General is seeking financial penalties. The lawsuit requests that Valve produce “an accounting of monies lost by consumers in New York as a result of illegal acts” and provide “a full restitution and pay damages caused directly and indirectly.” It also calls for Valve to “pay a fine of three times the amount of its gain from the illegal practices alleged herein.”